[United States Senate Manual, 107th Congress]
[S. Doc. 107-1]
[USCODETITLE]
[Pages 816-841]
[From the U.S. Government Publishing Office, www.gpo.gov]



[[Page 816]]


 
                          TITLE 26.--INTERNAL REVENUE CODE

            
                              Subtitle A.--INCOME TAXES

            
                        Chapter 1.--NORMAL TAXES AND SURTAXES

                                    * * * * * * *

            
                    Subchapter B.--Computation of Taxable Income

                                    * * * * * * *

            
                Part II.--ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME

                                    * * * * * * *

      1035  Sec. 84. Transfer of appreciated property to political 
                organization.
            (a) General rule
                If--
                            (1) any person transfers property to a 
                        political organization, and
                            (2) the fair market value of such property 
                        exceeds its adjusted basis,

            then for purposes of this chapter the transferor shall be 
            treated as having sold such property to the political 
            organization on the date of the transfer, and the transferor 
            shall be treated as having realized an amount equal to the 
            fair market value of such property on such date.

            (b) Basis of property
                In the case of a transfer of property to a political 
            organization to which subsection (a) applies, the basis of 
            such property in the hands of the political organization 
            shall be the same as it would be in the hands of the 
            transferor, increased by the amount of gain recognized to 
            the transferor by reason of such transfer.
            (c) Political organization defined
                For purposes of this section, the term ``political 
            organization'' has the meaning given to such term by section 
            527(e)(1). (Jan. 3, 1975, Pub. L. 93-625, Sec. 13(a), 88 
            Stat. 2120.)

                                    * * * * * * *

            
                 Part VI.--ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND 
                                    CORPORATIONS

                                    * * * * * * *

  

      1036  Sec. 162. Trade or business expenses.
            (a) In general
                There shall be allowed as a deduction all the ordinary 
            and necessary expenses paid or incurred during the taxable 
            year in carrying on any trade or business, including--

[[Page 817]]

                            (1) a reasonable allowance for salaries or 
                        other compensation for personal services 
                        actually rendered;
                            (2) traveling expenses (including amounts 
                        expended for meals and lodging other than 
                        amounts which are lavish or extravagant under 
                        the circumstances) while away from home in the 
                        pursuit of a trade or business; and
                            (3) rentals or other payments required to be 
                        made as a condition to the continued use or 
                        possession, for purposes of the trade or 
                        business, of property to which the taxpayer has 
                        not taken or is not taking title or in which he 
                        has no equity.

            For purposes of the preceding sentence, the place of 
            residence of a Member of Congress (including any Delegate 
            and Resident Commissioner) within the State, congressional 
            district, or possession which he represents in Congress 
            shall be considered his home, but amounts expended by such 
            Members within each taxable year for living expenses shall 
            not be deductible for income tax purposes in excess of 
            $3,000. For purposes of paragraph (2), the taxpayer shall 
            not be treated as being temporarily away from home during 
            any period of employment if such period exceeds 1 year. The 
            preceding sentence shall not apply to any Federal employee 
            during any period for which such employee is certified by 
            the Attorney General (or the designee thereof) as traveling 
            on behalf of the United States in temporary duty status to 
            investigate or prosecute, or provide support services for 
            the investigation or prosecution of, a Federal crime. (Aug. 
            16, 1954, ch. 736, 68A Stat. 45; Oct. 16, 1962, Pub. L. 87-
            834, Sec. 4(b), 76 Stat. 960, 976; Oct. 4, 1976, Pub. L. 94-
            455, Sec. 1901(c) (4), 90 Stat. 1803; Oct. 1, 1981, Pub. L. 
            97-51, Sec. 139(b)(1), 95 Stat. 967; July 18, 1982, Pub. L. 
            97-216, Sec. 215(a), 96 Stat. 194; Oct. 24, 1992, Pub. L. 
            102-486, Sec. 1938(a), 106 Stat. 3033; Aug. 5, 1997, Pub. L. 
            105-34, Sec. 1204(a), 111 Stat. 995; July 22, 1998, Pub. L. 
            105-206, Sec. 6012(a), 112 Stat. 818.)

                                    * * * * * * *

  

            
                         Subchapter F.--Exempt Organizations

                                    * * * * * * *

  

            
                          Part VI.--POLITICAL ORGANIZATIONS

      1037  Sec. 527. Political organizations.
            (a) General rule
                A political organization shall be subject to taxation 
            under this subtitle only to the extent provided in this 
            section. A political organization shall be considered an 
            organization exempt from income taxes for the purpose of any 
            law which refers to organizations exempt from income taxes.

            (b) Tax imposed
                (1) In general.--A tax is hereby imposed for each 
            taxable year on the political organization taxable income of 
            every political organization. Such tax shall be computed by 
            multiplying the political organization taxable income by the 
            highest rate of tax specified in section 11(b).
                (2) Alternative tax in case of capital gains.--If for 
            any taxable year any political organization has a net 
            capital gain, then, in lieu of the tax imposed by paragraph 
            (1), there is hereby imposed a tax (if such

[[Page 818]]

            a tax is less than the tax imposed by paragraph (1)) which 
            shall consist of the sum of--
                            (A) a partial tax, computed as provided by 
                        paragraph (1), on the political organization 
                        taxable income determined by reducing such 
                        income by the amount of such gain, and
                            (B) an amount determined as provided in 
                        section 1201(a) on such gain.

            (c) Political organization taxable income defined
                (1) Taxable income defined.--For purposes of this 
            section, the political organization taxable income of any 
            organization for any taxable year is an amount equal to the 
            excess (if any) of--
                            (A) the gross income for the taxable year 
                        (excluding any exempt function income), over
                            (B) the deductions allowed by this chapter 
                        which are directly connected with the production 
                        of the gross income (excluding exempt function 
                        income), computed with the modifications 
                        provided in paragraph (2).
                (2) Modifications.--For purposes of this subsection--
                            (A) there shall be allowed a specific 
                        deduction of $100,
                            (B) no net operating loss deduction shall be 
                        allowed under section 172, and
                            (C) no deduction shall be allowed under part 
                        VIII of subchapter B (relating to special 
                        deductions for corporations).
                (3) Exempt function income.--For purposes of this 
            subsection, the term ``exempt function income'' means any 
            amount received as--
                            (A) a contribution of money or other 
                        property,
                            (B) membership dues, a membership fee or 
                        assessment from a member of the political 
                        organization,
                            (C) proceeds from a political fundraising or 
                        entertainment event, or proceeds from the sale 
                        of political campaign materials, which are not 
                        received in the ordinary course of any trade or 
                        business, or
                            (D) proceeds from the conducting of any 
                        bingo game (as defined in section 513(f)(2)),

            to the extent such amount is segregated for use only for the 
            exempt function of the political organization.

            (d) Certain uses not treated as income to candidate
                For purposes of this title, if any political 
            organization--
                            (1) contributes any amount to or for the use 
                        of any political organization which is treated 
                        as exempt from tax under subsection (a) of this 
                        section,
                            (2) contributes any amount to or for the use 
                        of any organization described in paragraph (1) 
                        or (2) of section 509(a) which is exempt from 
                        tax under section 501(a), or
                            (3) deposits any amount in the general fund 
                        of the Treasury or in the general funds of any 
                        State or local government,

            such amount shall be treated as an amount not diverted for 
            the personal use of the candidate or any other person. No 
            deduction shall be allowed under this title for the 
            contribution or deposit of any amount described in the 
            preceding sentence.


[[Page 819]]



            (e) Other definitions
                For purposes of this section--
                (1) Political organization.--The term ``political 
            organization'' means a party, committee, association, fund, 
            or other organization (whether or not incorporated) 
            organized and operated primarily for the purpose of directly 
            or indirectly accepting contributions or making 
            expenditures, or both, for an exempt function.
                (2) Exempt function.--The term ``exempt function'' means 
            the function of influencing or attempting to influence the 
            selection, nomination, election, or appointment of any 
            individual to any Federal, State, or local public office or 
            office in a political organization, or the election of 
            Presidential or Vice-Presidential electors, whether or not 
            such individual or electors are selected, nominated, 
            elected, or appointed. Such term includes the making of 
            expenditures relating to an office described in the 
            preceding sentence which, if incurred by the individual, 
            would be allowable as a deduction under section 162(a).
                (3) Contributions.--The term ``contributions'' has the 
            meaning given to such term by section 271(b)(2).
                (4) Expenditures.--The term ``expenditures'' has the 
            meaning given to such term by section 271(b)(3).
                (5) Qualified State or Local Political Organization.--
                            (A) In general.--The term ``qualified State 
                        or local political organization'' means a 
                        political organization--

                                (i) all the exempt functions of which 
                            are solely for the purposes of influencing 
                            or attempting to influence the selection, 
                            nomination, election, or appointment of any 
                            individual to any State or local public 
                            office or office in a State or local 
                            political organization,

                                (ii) which is subject to State law that 
                            requires the organization to report (and it 
                            so reports)--

                                        (I) information regarding each 
                                    separate expenditure from and 
                                    contribution to such organization, 
                                    and

                                        (II) information regarding the 
                                    person who makes such contribution 
                                    or receives such expenditure,

                              which would otherwise be required to be 
                              reported under this section, and

                                (iii) with respect to which the reports 
                            referred to in clause (ii) are (I) made 
                            public by the agency with which such reports 
                            are filed, and (II) made publicly available 
                            for inspection by the organization in the 
                            manner described in section 6104(d).

                            (B) Certain State law differences 
                        disregarded.--An organization shall not be 
                        treated as failing to meet the requirements of 
                        subparagraph (A)(ii) solely by reason of 1 or 
                        more of the following:

                                (i) The minimum amount of any 
                            expenditure or contribution required to be 
                            reported under State law is not more than 
                            $300 greater than the minimum amount 
                            required to be reported under subsection 
                            (j).

                                (ii) The State law does not require the 
                            organization to identify 1 or more of the 
                            following:

                                        (I) The employer of any person 
                                    who makes contributions to the 
                                    organization.

                                        (II) The occupation of any 
                                    person who makes contributions to 
                                    the organization.

[[Page 820]]

                                        (III) The employer of any person 
                                    who receives expenditures from the 
                                    organization.

                                        (IV) The occupation of any 
                                    person who receives expenditures 
                                    from the organization.

                                        (V) The purpose of any 
                                    expenditure of the organization.

                                        (VI) The date any contribution 
                                    was made to the organization.

                                        (VII) The date of any 
                                    expenditure of the organization.

                            (C) De Minimis Errors.--An organization 
                        shall not fail to be treated as a qualified 
                        State or local political organization solely 
                        because such organization makes de minimis 
                        errors in complying with the State reporting 
                        requirements and the public inspection 
                        requirements described in subparagraph (A) as 
                        long as the organization corrects such errors 
                        within a reasonable period after the 
                        organization becomes aware of such errors.
                            (D) Participation of Federal candidate or 
                        office holder.--The term ``qualified State or 
                        local political organization'' shall not include 
                        any organization otherwise described in 
                        subparagraph (A) if a candidate for nomination 
                        or election to Federal elective public office or 
                        an individual who holds such office--

                                (i) controls or materially participates 
                            in the direction of the organization.

                                (ii) solicits contributions to the 
                            organization (unless the Secretary 
                            determines that such solicitations resulted 
                            in de minimis contributions and were made 
                            without the prior knowledge and consent, 
                            whether explicit or implicit, of the 
                            organization or its officers, directors, 
                            agents, or employees, or

                                (iii) directs, in whole or in part, 
                            disbursements by the organization.

                                    * * * * * * *

  

            (g) Treatment of newsletter funds
                (1) In general.--For purposes of this section, a fund 
            established and maintained by an individual who holds, has 
            been elected to, or is a candidate (within the meaning of 
            paragraph (3)) for nomination or election to, any Federal, 
            State, or local elective public office for use by such 
            individual exclusively for the preparation and circulation 
            of such individual's newsletter shall, except as provided in 
            paragraph (2), be treated as if such fund constituted a 
            political organization.
                (2) Additional modifications.--In the case of any fund 
            described in paragraph (1)--
                            (A) the exempt function shall be only the 
                        preparation and circulation of the newsletter, 
                        and
                            (B) the specific deduction provided by 
                        subsection (c)(2)(A) shall not be allowed.
                (3) Candidate.--For purposes of paragraph (1), the term 
            ``candidate'' means, with respect to any Federal, State, or 
            local elective public office, an individual who--
                            (A) publicly announces that he is a 
                        candidate for nomination or election to such 
                        office, and
                            (B) meets the qualifications prescribed by 
                        law to hold such office.

[[Page 821]]

            (h) Special rule for principal campaign committees
                (1) In general.--In the case of a political organization 
            which is a principal campaign committee, paragraph (1) of 
            subsection (b) shall be applied by substituting ``the 
            appropriate rates'' for ``the highest rate''.
                (2) Principal campaign committee defined.--
                            (A) In general.--For purposes of this 
                        subsection, the term ``principal campaign 
                        committee'' means the political committee 
                        designated by a candidate for Congress as his 
                        principal campaign committee for purposes of--

                                (i) section 302(e) of the Federal 
                            Election Campaign Act of 1971 (2 U.S.C. 
                            432(e)), and

                                (ii) this subsection.

                            (B) Designation.--A candidate may have only 
                        1 designation in effect under subparagraph 
                        (A)(ii) at any time and such designation--

                                (i) shall be made at such time and in 
                            such manner as the Secretary may prescribe 
                            by regulations, and

                                (ii) once made, may be revoked only with 
                            the consent of the Secretary.

            Nothing in this subsection shall be construed to require any 
            designation where there is only one political committee with 
            respect to a candidate.

            (i) Organizations must notify Secretary that they are 
                section 527 organizations
                (1) In general.--Except as provided in paragraph (5), an 
            organization shall not be treated as an organization 
            described in this section--
                            (A) unless it has given notice to the 
                        Secretary electronically that it is to be so 
                        treated, or
                            (B) if the notice is given after the time 
                        required under paragraph (2), the organization 
                        shall not be so treated for any period before 
                        such notice is given or, in the case of any 
                        material change in the information required 
                        under paragraph (3), for the period beginning on 
                        the date on which the material change occurs and 
                        ending on the date on which such notice is 
                        given,
                (2) Time to give notice.--The notice required under 
            paragraph (1) shall be transmitted not later than 24 hours 
            after the date on which the organization is established or, 
            in the case of any material change in the information 
            required under paragraph (3), not later than 30 days after 
            such material change.
                (3) Contents of notice.--The notice required under 
            paragraph (1) shall include information regarding--
                            (A) the name and address of the organization 
                        (including any business address, if different) 
                        and its electronic mailing address,
                            (B) the purpose of the organization,
                            (C) the names and addresses of its officers, 
                        highly compensated employees, contact person, 
                        custodian of records, and members of its Board 
                        of Directors,
                            (D) the name and address of, and 
                        relationship to, any related entities (within 
                        the meaning of section 168(h)(4)),
                            (E) whether the organization intends to 
                        claim an exemption from the requirements of 
                        subsection (j) or section 6033, and
                            (F) such other information as the Secretary 
                        may require to carry out the Internal Revenue 
                        laws.

[[Page 822]]

                (4) Effect of failure.--In the case of an organization 
            failing to meet the requirements of paragraph (1) for any 
            period, the taxable income of such organization shall be 
            computed by taking into account any exempt function income 
            (and any deductions directly connected with the production 
            of such income) or in the case of a failure relating to a 
            material change, by taking into account such income and 
            deductions only during the period beginning on the date on 
            which the material change occurs and ending on the date on 
            which notice is given under this subsection. For purposes of 
            the preceding sentence, the term ``exempt function income'' 
            means any amount described in a subparagraph of subsection 
            (c)(3), whether or not segregated for use for any exempt 
            function.
                (5) Exceptions.--This subsection shall not apply to any 
            organization--
                            (A) to which this section applies solely be 
                        reason of subsection (f)(1),
                            (B) which reasonably anticipates that it 
                        will not have gross receipts of $25,000 or more 
                        for any taxable year, or,
                            (C) which is a political committee of a 
                        State or local candidate or which is a State or 
                        local committee of a political party.
                (6) Coordination with other requirements.--This 
            subsection shall not apply to any person required (without 
            regard to this subsection) to report under the Federal 
            Election Campaign Act of 1971 (2 U.S.C. 431 et seq.) as a 
            political committee.
            (j) Required Disclosure of Expenditures and Contributions
                (1) Penalty for failure.--In the case of--
                            (A) a failure to make the required 
                        disclosures under paragraph (2) at the time and 
                        in the manner prescribed therefor, or
                            (B) a failure to include any of the 
                        information required to be shown by such 
                        disclosures or to show the correct information,

            there shall be paid by the organization an amount equal to 
            the rate of tax specified in subsection (b)(1) multiplied by 
            the amount to which the failure relates. For purpose of 
            subtitle F, the amount imposed by this paragraph shall be 
            assessed and collected in the same manner as penalties 
            imposed by section 6652(c).

                (2) Required disclosure.--A political organization which 
            accepts a contribution, or makes an expenditure, for an 
            exempt function during any calendar year shall file with the 
            Secretary either--
                            (A)(i) in the case of a calendar year in 
                        which a regularly scheduled election is held--

                                (I) quarterly reports, beginning with 
                            the first quarter of the calendar year in 
                            which a contribution is accepted or 
                            expenditure is made, which shall be filed 
                            not later than the fifteenth day after the 
                            last day of each calendar quarter, except 
                            that the report for the quarter ending on 
                            December 31 of such calendar year shall be 
                            filed not later than January 31 of the 
                            following calendar year,

                                (II) a pre-election report, which shall 
                            be filed not later than the twelfth day 
                            before (or posted by registered or certified 
                            mail not later than the fifteenth day 
                            before) any election with respect to which 
                            the organization makes a contribution or 
                            expenditure, and which shall be complete as 
                            of the twentieth day before the election, 
                            and

[[Page 823]]

                                (III) a post-general election report, 
                            which shall be filed not later than the 
                            thirtieth day after the general election and 
                            which shall be complete as of the twentieth 
                            day after such general election, and

                                (ii) in the case of any other calendar 
                            year, a report covering the period beginning 
                            January 1 and ending June 30, which shall be 
                            filed no later than July 31 and a report 
                            covering the period beginning July 1 and 
                            ending December 31, which shall be filed no 
                            later than January 31 of the following 
                            calendar year, or

                            (B) monthly reports for the calendar year, 
                        beginning with the first month of the calendar 
                        year in which a contribution is accepted or 
                        expenditure is made, which shall be filed not 
                        later than the twentieth day after the last day 
                        of the month and shall be complete as of the 
                        last day of the month, except that, in lieu of 
                        filing the reports otherwise due in November and 
                        December of any year in which a regularly 
                        scheduled general election is held, a pre-
                        general election report shall be filed in 
                        accordance with subparagraph (A)(i)(II), a post-
                        general election report shall be filed in 
                        accordance with subparagraph (A)(i)(III), and a 
                        year end report shall be filed not later than 
                        January 31 of the following calendar year.
                (3) Contents of report.--A report required under 
            paragraph (2) shall contain the following information:
                            (A) The amount, date, and purpose of each 
                        expenditure made to a person if the aggregate 
                        amount of expenditures to such person during the 
                        calendar year equals or exceeds $500 and the 
                        name and address of the person (in the case of 
                        an individual, including the occupation and name 
                        of employer of such individual).
                            (B) The name and address (in the case of an 
                        individual, including the occupation and name of 
                        employer of such individual) of all contributors 
                        which contributed an aggregate amount of $200 or 
                        more to the organization during the calendar 
                        year and the amount and date of the 
                        contribution.

            Any expenditure or contribution disclosed in a previous 
            reporting period is not required to be included in the 
            current reporting period.

                (4) Contracts to spend or contribute.--For purposes of 
            this subsection, a person shall be treated as having made an 
            expenditure or contribution if the person has contracted or 
            is otherwise obligated to make the expenditure or 
            contribution.
                (5) Coordination with other requirements.--This 
            subsection shall not apply--
                            (A) to any person required (without regard 
                        to this subsection) to report under the Federal 
                        Election Campaign Act of 1971 (2 U.S.C. 431 et 
                        seq.) as a political committee,
                            (B) to any State or local committee of a 
                        political party or political committee of a 
                        State or local candidate,
                            (C) to any organization which is a qualified 
                        State or local political organization,
                            (D) to any organization which reasonably 
                        anticipates that it will not have gross receipts 
                        of $25,000 or more for any taxable year,
                            (E) to any organization to which this 
                        section applies solely by reason of subsection 
                        (f)(1), or

[[Page 824]]

                            (F) with respect to any expenditure which is 
                        an independent expenditure (as defined in 
                        section 301 of such Act).
                (6) Election.--For purposes of this subsection, the term 
            ``election'' means--
                            (A) a general, special, primary, or runoff 
                        election for a Federal office,
                            (B) a convention or caucus of a political 
                        party which has authority to nominate a 
                        candidate for Federal office,
                            (C) a primary election held for the 
                        selection of delegates to a national nominating 
                        convention of a political party, or
                            (D) a primary election held for the 
                        expression of a preference for the nomination of 
                        individuals for election to the office of 
                        President.
                (7) Electronic filing.--Any report required under 
            paragraph (2) with respect to any calendar year shall be 
            filed in electronic form if the organization has, or has 
            reason to expect to have, contributions exceeding $50,000 or 
            expenditures exceeding $50,000 in such calendar year.
            (k) Public Availability of notices and reports
                (1) In general.--The Secretary shall make any notice 
            described in subsection (i)(1) or report described in 
            subsection (j)(7) available for public inspection on the 
            Internet not later than 48 hours after such notice or report 
            has been filed (in addition to such public availability as 
            may be made under section 6104(d)(7)).
                (2) Access.--The Secretary shall make the entire 
            database of notices and reports which are made available to 
            the public under paragraph (1) searchable by the following 
            items (to the extent the items are required to be included 
            in the notices and reports):
                            (A) Names, States, zip codes, custodians of 
                        records, directors, and general purposes of the 
                        organizations.
                            (B) Entities related to the organizations.
                            (C) Contributors to the organizations.
                            (D) Employers of such contributors.
                            (E) Recipients of expenditures by the 
                        organizations.
                            (F) Ranges of contributions and 
                        expenditures.
                            (G) Time periods of the notices and reports.
                            Such database shall be downloadable.
            (l) Authority to waive.--The Secretary may waive all or any 
                portion of the
                (1) tax assessed on an organization by reason of the 
            failure of the organization to comply with the requirements 
            of subsection (i), or
                (2) amount imposed under subsection (j) for a failure to 
            comply with the requirements thereof,

            on a showing that such failure was due to reasonable cause 
            and not due to willful neglect.

            (Jan. 3, 1975, Pub. L. 93-625, Sec. 10(a), 88 Stat. 2116; 
            Oct. 4, 1976, Pub. L. 94-455, Sec. 1901(b)(33)(c), 90 Stat. 
            1801; Oct. 21, 1978, Pub. L. 95-502, Sec. 302(a), 92 Stat. 
            1702; Nov. 6, 1978, Pub. L. 95-600, Sec. 301(b)(6), 92 Stat. 
            2821; Aug. 13, 1981, Pub. L. 97-34, Sec. 128, 95 Stat. 203; 
            July 18, 1984, Pub. L. 98-369, Sec. Sec. 474(r)(16), 722(c), 
            98 Stat. 843, 973; Oct. 22, 1986, Pub. L. 99-514, 
            Sec. 112(b)(1), 100 Stat. 2085; Nov. 10, 1988, Pub. L. 100-
            647, Sec. 1001(b)(3)(B), 102 Stat. 3349; July 1, 2000, Pub.

[[Page 825]]

            L. 106-230, Sec. Sec. 1(a), 2(a), 114 Stat. 477, 479; ----, 
            2002, Pub. L. 107---, Sec. Sec. 1(a), 2, 5(a), 6, 116 Stat. 
            --.)

                                    * * * * * * *

  

            
             Subchapter N.--Tax Based on Income From Sources Within or 
                             Without the United States

                                    * * * * * * *

  

            
                Part II.--NONRESIDENT ALIENS AND FOREIGN CORPORATIONS

                                    * * * * * * *

  

            
                        Subpart D.--Miscellaneous Provisions

                                    * * * * * * *

  

      1038  Sec. 896. Adjustment of tax on nationals, residents, and 
                corporations of certain foreign countries.

                                    * * * * * * *

            (d) Notification of Congress required
                No proclamation shall be issued by the President 
            pursuant to this section unless, at lest 30 days prior to 
            such proclamation, he has notified the Senate and the House 
            of Representatives of his intention to issue such 
            proclamation. (Nov. 13, 1966, Pub. L. 89-809, Sec. 105(b), 
            80 Stat. 1563.)
            
                       Subchapter P.--Capital Gains and Losses

                                    * * * * * * *

  

            
             Part III.--GENERAL RULES FOR DETERMINING CAPITAL GAINS AND 
                                       LOSSES

      1039  Sec. 1221. Capital asset defined.
                (a) In general.--For purposes of this subtitle, the term 
            ``capital asset'' means property held by the taxpayer 
            (whether or not connected with his trade or business), but 
            does not include--

                                    * * * * * * *

  

                (5) a publication of the United States Government 
            (including the Congressional Record) which is received from 
            the United States Government or any agency thereof, other 
            than by purchase at the price at which it is offered for 
            sale to the public, and which is held by--
                            (A) a taxpayer who so received such 
                        publication, or
                            (B) a taxpayer in whose hands the basis of 
                        such publication is determined, for purposes of 
                        determining gain from a sale or exchange, in 
                        whole or in part by reference to the basis of 
                        such publication in the hands of a taxpayer 
                        described in subparagraph (A). (Aug. 16, 1954, 
                        ch. 736. 68A Stat. 321; Oct. 4, 1976, Pub. L. 
                        94-455, Sec. 2132 (a), 90 Stat. 1925; Aug. 13, 
                        1981, Pub. L. 97-34, Sec. 505

[[Page 826]]

                        (a), 95 Stat 331; Dec. 17, 1999, Pub. L. 106-
                        170, Sec. 532(a), 113 Stat. 1928.

                                    * * * * * * *

            
                      SUBTITLE F.--PROCEDURE AND ADMINISTRATION

            
                        Chapter 61.--INFORMATION AND RETURNS

            
                         Subchapter A.--Returns and Records

                                    * * * * * * *

  

            
                           Part III.--INFORMATION RETURNS

            
               Subpart A.--Information Concerning Persons Subject to 
                                 Special Provisions

                                    * * * * * * *

  

      1040  Sec. 6033. Returns by exempt organizations

                                    * * * * * * *

  

            (g) Returns required by political organizations
                (1) In general.--This section shall apply to a political 
            organization (as defined by section 527(e)(1)) which has 
            gross receipts of $25,000 or more for the taxable year. In 
            the case of a political organization which is a qualified 
            State or local political organization (as defined in section 
            527(e)(5)), the preceding sentence shall be applied by 
            substituting ``$100,000'' for ``$25,000''.
                (2) Annual returns.--Political organizations described 
            in paragraph (1) shall file an annual return--
                            (A) containing the information required, and 
                        complying with the other requirements, under 
                        subsection (a)(1) for organizations exempt from 
                        taxation under section 501(a), with such 
                        modifications as the Secretary considers 
                        appropriate to require only information which is 
                        necessary for the purposes of carrying out 
                        section 527, and
                            (B) containing such other information as the 
                        Secretary deems necessary to carry out the 
                        provisions of this subsection.
                (3) Mandatory exceptions from filing.--Paragraph (2) 
            shall not apply to an organization--
                            (A) which is a State or local committee of a 
                        political party, or political committee of a 
                        State or local candidate,
                            (B) which is a caucus or association of 
                        State or local officials,
                            (C) which is an authorized committee (as 
                        defined in section 301(6) of the Federal 
                        Election Campaign Act of 1971) of a candidate 
                        for Federal office,
                            (D) which is a national committee (as 
                        defined in section 301(14) of the Federal 
                        Election Campaign Act of 1971) of a political 
                        party,
                            (E) which is a United States House of 
                        Representatives or United States Senate campaign 
                        committee of a political party committee,
                            (F) which is required to report under the 
                        Federal Election campaign Act of 1971 as a 
                        political committee (as defined in section 
                        301(4) of such Act), or
                            (G) to which section 527 applies for the 
                        taxable year solely by reason of subsection 
                        (f)(1) of such section.
                (4) Discretionary exception.--The Secretary may relieve 
            any organization required under paragraph (2) to file and 
            information return from

[[Page 827]]

            filing such a return if the Secretary determines that such 
            filing is not necessary to the efficient administration of 
            the Internal Revenue laws. (----, 2002, Pub. L. 107---, 
            Sec. 3(c), 116 Stat.----.)

                                    * * * * * * *

  

            
                       Subchapter B.--Miscellaneous Provisions

                                    * * * * * * *

  

      1041  Sec. 6103. Confidentiality and disclosure of returns and 
                return information.

                                    * * * * * * *

            (f) Disclosure to committees of Congress
                (1) Committee on Ways and Means, Committee on Finance, 
            and Joint Committee on Taxation.--Upon written request from 
            the chairman of the Committee on Ways and Means of the House 
            of Representatives, the chairman of the Committee on Finance 
            of the Senate, or the chairman of the Joint Committee on 
            Taxation, the Secretary shall furnish such committee with 
            any return or return information specified in such request, 
            except that any return or return information which can be 
            associated with, or otherwise identify, directly or 
            indirectly, a particular taxpayer shall be furnished to such 
            committee only when sitting in closed executive session 
            unless such taxpayer otherwise consents in writing to such 
            disclosure.
                (2) Chief of Staff of Joint Committee on Taxation.--Upon 
            written request by the Chief of Staff of the Joint Committee 
            on Taxation, the Secretary shall furnish him with any return 
            or return information specified in such request. Such Chief 
            of Staff may submit such return or return information to any 
            committee described in paragraph (1), except that any return 
            or return information which can be associated with, or 
            otherwise identify, directly or indirectly, a particular 
            taxpayer shall be furnished to such committee only when 
            sitting in closed executive session unless such taxpayer 
            otherwise consents in writing to such disclosure.
                (3) Other committees.--Pursuant to an action by, and 
            upon written request by the chairman of, a committee of the 
            Senate or the House of Representatives (other than a 
            committee specified in paragraph (1)) specially authorized 
            to inspect any return or return information by a resolution 
            of the Senate or the House of Representatives or, in the 
            case of a joint committee (other than the joint committee 
            specified in paragraph (1)) by concurrent resolution, the 
            Secretary shall furnish such committee, or a duly authorized 
            and designated subcommittee thereof, sitting in closed 
            executive session, with any return or return information 
            which such resolution authorizes the committee or 
            subcommittee to inspect. Any resolution described in this 
            paragraph shall specify the purpose for which the return or 
            return information is to be furnished and that such 
            information cannot reasonably be obtained from any other 
            source.
                (4) Agents of committees and submission of information 
            to Senate or House of Representatives.--
                            (A) Committees described in paragraph (1).--
                        Any committee described in paragraph (1) or the 
                        Chief of Staff of the Joint Committee on 
                        Taxation shall have the authority, acting 
                        directly, or by or through such examiners or 
                        agents as the chairman of such com

[[Page 828]]

                        mittee or such chief of staff may designate or 
                        appoint, to inspect returns and return 
                        information at such time and in such manner as 
                        may be determined by such chairman or chief of 
                        staff. Any return or return information obtained 
                        by or on behalf of such committee pursuant to 
                        the provisions of this subsection may be 
                        submitted by the committee to the Senate or the 
                        House of Representatives, or to both. The Joint 
                        Committee on Taxation may also submit such 
                        return or return information to any other 
                        committee described in paragraph (1), except 
                        that any return or return information which can 
                        be associated with, or otherwise identify, 
                        directly or indirectly, a particular taxpayer 
                        shall be furnished to such committee only when 
                        sitting in closed executive session unless such 
                        taxpayer otherwise consents in writing to such 
                        disclosure.
                            (B) Other committees.--Any committee or 
                        subcommittee described in paragraph (3) shall 
                        have the right, acting directly, or by or 
                        through no more than four examiners or agents, 
                        designated or appointed in writing in equal 
                        numbers by the chairman and ranking minority 
                        member of such committee or subcommittee, to 
                        inspect returns and return information at such 
                        time and in such manner as may be determined by 
                        such chairman and ranking minority member. Any 
                        return or return information obtained by or on 
                        behalf of such committee or subcommittee 
                        pursuant to the provisions of this subsection 
                        may be submitted by the committee to the Senate 
                        or the House of Representatives, or to both, 
                        except that any return or return information 
                        which can be associated with, or otherwise 
                        identify, directly or indirectly, a particular 
                        taxpayer, shall be furnished to the Senate or 
                        the House of Representatives only when sitting 
                        in closed executive session unless such taxpayer 
                        otherwise consents in writing to such 
                        disclosure.
                (5) Disclosure by whistleblower.--Any person who 
            otherwise has or had access to any return or return 
            information under this section may disclose such return or 
            return information to a committee referred to in paragraph 
            (1) or any individual authorized to receive or inspect 
            information under paragraph (4)(A) if such person believes 
            such return or return information may relate to possible 
            misconduct, maladministration, or taxpayer abuse.
            (g) Disclosure to President and certain other persons

                                    * * * * * * *

            (5) Reporting requirements
                Within 30 days after the close of each calendar quarter, 
            the President and the head of any agency requesting returns 
            and return information under this subsection shall each file 
            a report with the Joint Committee on Taxation setting forth 
            the taxpayers with respect to whom such requests were made 
            during such quarter under this subsection, the returns or 
            return information involved, and the reasons for such 
            requests. The President shall not be required to report on 
            any request for returns and return information pertaining to 
            an individual who was an officer or employee of the 
            executive branch of the Federal Government at the time such 
            request was made. Reports filed pursuant to this paragraph 
            shall not be disclosed unless the Joint Committee on 
            Taxation determines that disclosure thereof (including 
            identifying details) would be in the national interest. Such 
            reports shall be maintained by the Joint

[[Page 829]]

            Committee on Taxation for a period not exceeding 2 years 
            unless, within such period, the Joint Committee on Taxation 
            determines that a disclosure to the Congress is necessary. 
            (Pub. L. 105-65, Title V, (Sec. 542(b), 111 Stat. 1412; July 
            22, 1998, Pub. L. 105-206, Title I, Sec. 1101(b), Title III, 
            Sec. Sec. 3702(a), (b), 3708(a), 3711(b), Title VI, 
            Sec. Sec. 6007(f)(4), 6009(d), 6012(b)(2), (4), 6019(c), 
            6023(22), 112 Stat. 696, 776, 777, 778, 781, 810, 812, 819, 
            823, 826; Oct. 21, 1998, Pub. L. 105-277, Div. J, Title I, 
            Sec. 1006, Title IV, Sec. Sec. 4002(a), (h), 4006(a), 112 
            Stat. 2681-900, 2681-906, 2681-907, 2681-912; Dec. 17, 1999, 
            Pub. L. 106-170, Title V, Sec. 521(a)(1), 113 Stat. 1925.)

                                    * * * * * * *

      1042  Sec. 6104. Publicity of information required from certain 
                exempt organizations and certain trusts.
            (a) Inspection of applications for tax exemption or notice 
                of status
                (1) Public inspection.--
                            (A) Organizations described in section 501 
                        or 527.--If an organization described in section 
                        501 (c) or (d) is exempt from taxation under 
                        section 501(a) for any taxable year or a 
                        political organization is exempt from taxation 
                        under section 527 for any taxable year, the 
                        application filed by the organization with 
                        respect to which the Secretary made his 
                        determination that such organization was 
                        entitled to exemption under section 501(a) or 
                        notice of status filed by the organization under 
                        section 527(i), together with any papers 
                        submitted in support of such application or 
                        notice, and any letter or other document issued 
                        by the Internal Revenue Service with respect to 
                        such application or notice shall be open to 
                        public inspection at the national office of the 
                        Internal Revenue Service. In the case of any 
                        application or notice filed after the date of 
                        the enactment of this subparagraph, a copy of 
                        such application or notice and such letter or 
                        document shall be open to public inspection at 
                        the appropriate field office of the Internal 
                        Revenue Service (determined under regulations 
                        prescribed by the Secretary). Any inspection 
                        under this subparagraph may be made at such 
                        times, and in such manner, as the Secretary 
                        shall by regulations prescribe. After the 
                        application of any organization for exemption 
                        from taxation under section 501(a) has been 
                        opened to public inspection under this 
                        subparagraph, the Secretary shall, on the 
                        request of any person with respect to such 
                        organization, furnish a statement indicating the 
                        subsection and paragraph of section 501 which it 
                        has been determined describes such organization.
                            (B) Pension, etc., plans.--The following 
                        shall be open to public inspection at such times 
                        and in such places as the Secretary may 
                        prescribe:

                                (i) any application filed with respect 
                            to the qualification of a pension, profit-
                            sharing, or stock bonus plan under section 
                            401(a) or 403(a), an individual retirement 
                            account described in section 408(a), or an 
                            individual retirement annuity described in 
                            section 408(b),

                                (ii) any application filed with respect 
                            to the exemption from tax under section 
                            501(a) of an organization forming part of a 
                            plan or account referred to in clause (i),

[[Page 830]]

                                (iii) any papers submitted in support of 
                            an application referred to in clause (i) or 
                            (ii), and

                                (iv) any letter or other document issued 
                            by the Internal Revenue Service and dealing 
                            with the qualification referred to in clause 
                            (i) or the exemption from tax referred to in 
                            clause (ii).

            Except in the case of a plan participant, this subparagraph 
            shall not apply to any plan referred to in clause (i) having 
            not more than 25 participants.

                            (C) Certain names and compensation not to be 
                        open to public inspection.--In the case of any 
                        application, document, or other papers, referred 
                        to in subparagraph (B), information from which 
                        the compensation (including deferred 
                        compensation) of any individual may be 
                        ascertained shall not be opened to public 
                        inspection under subparagraph (B).
                            (D) Withholding of certain other 
                        information.--Upon request of the organization 
                        submitting any supporting papers described in 
                        subparagraph (A) or (B), the Secretary shall 
                        withhold from public inspection any information 
                        contained therein which he determines relates to 
                        any trade secret, patent, process, style of 
                        work, or apparatus, of the organization, if he 
                        determines that public disclosure of such 
                        information would adversely affect the 
                        organization. The Secretary shall withhold from 
                        public inspection any information contained in 
                        supporting papers described in subparagraph (A) 
                        or (B) the public disclosure of which he 
                        determines would adversely affect the national 
                        defense.
                (2) Inspection by committee of Congress.--Section 
            6103(f) shall apply with respect to--
                            (A) the application for exemption of any 
                        organization described in section 501(c) or (d) 
                        which is exempt from taxation under section 
                        501(a) for any taxable year or notice of status 
                        of any political organization which is exempt 
                        from taxation under section 527 for any taxable 
                        year, and any application referred to in 
                        subparagraph (B) of subsection (a)(1) of this 
                        section, and
                            (B) any other papers which are in the 
                        possession of the Secretary and which relate to 
                        such application,

            as if such papers constituted returns.

                (3) Information available on internet and in person.--
                            (A) In general.--The Secretary shall make 
                        publicly available, on the Internet and at the 
                        offices of the Internal Revenue Service--

                                (i) a list of all political 
                            organizations which file a notice with the 
                            Secretary under section 527(i), and

                                (ii) the name, address, electronic 
                            mailing address, custodian of records, and 
                            contact person for such organization.

                            (B) Time to make information available.--The 
                        Secretary shall make available the information 
                        required under subparagraph (A) not later than 5 
                        business days after the Secretary receives a 
                        notice from a political organization under 
                        section 527(i).

            (Sept. 2, 1958, Pub. L. 85-866, Sec. 75(a) 72 Stat. 1660; 
            Sept. 2, 1974, Pub. L. 93-406, Sec. 1022(g)(1), (2), 88 
            Stat. 940; Oct. 4, 1976, Pub. L. 94-455, Sec. Sec. 1201(d), 
            1906(b)(13)(A), 90 Stat. 1667, 1834; Nov. 6, 1978, Pub. L. 
            95-600, Sec. 703(m), 92 Stat. 2943; July 18, 1984, Pub. L. 
            98-

[[Page 831]]

            369 Sec. 491(d)(49), 98 Stat. 852; July 1, 2000, Pub. L. 
            106-230, Sec. 1(b), 114 Stat. 478.)

                                    * * * * * * *

  

            
            Chapter 78.--DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

            
                      Subchapter A.--Examination and Inspection

                                    * * * * * * *

  

      1043  Sec. 7608. Authority of Internal Revenue enforcement 
                officers.

                                    * * * * * * *

            (c) Rules relating to undercover operations

                                    * * * * * * *

  

            (4) Audits.--
                (A) The Service shall conduct a detailed financial audit 
            of each undercover investigative operation which is closed 
            in each fiscal year; and
                            (i) submit the results of the audit in 
                        writing to the Secretary; and
                            (ii) not later than 180 days after such 
                        undercover operation is closed, submit a report 
                        to the Congress concerning such audit.
                (B) The Service shall also submit a report annually to 
            the Congress specifying as to its undercover investigative 
            operations--
                            (i) the number, by programs, of undercover 
                        investigative operations pending as of the end 
                        of the 1-year period for which such report is 
                        submitted;
                            (ii) the number, by programs, of undercover 
                        investigative operations commenced in the 1-year 
                        period for which such report is submitted;
                            (iii) the number, by programs, of undercover 
                        investigative operations closed in the 1-year 
                        period for which such report is submitted; and
                            (iv) the following information with respect 
                        to each undercover investigative operation 
                        pending as of the end of the 1-year period for 
                        which such report is submitted or closed during 
                        such 1-year period--

                                (I) the date the operation began and the 
                            date of the certification referred to in the 
                            last sentence of paragraph (1),

                                (II) the total expenditures under the 
                            operation and the amount and use of the 
                            proceeds from the operation,

                                (III) a detailed description of the 
                            operation including the potential violation 
                            being investigated and whether the operation 
                            is being conducted under grand jury 
                            auspices, and

                                (IV) the results of the operation 
                            including the results of criminal 
                            proceedings.

[[Page 832]]

            (Nov. 18, 1988, Pub. L. 100-690, Sec. 7601(c)(2), 102 Stat. 
            4504; July 30, 1996, Pub. L. 104-168, Sec. 1205(c)(1), 110 
            Stat. 1471.)

                                    * * * * * * *

            
                              Chapter 79.--DEFINITIONS

      1044  Sec. 7701. Definitions.

                                    * * * * * * *

            (j) Tax treatment of Federal Thrift Savings Fund
                (1) In general.--For purposes of this title--
                            (A) the Thrift Savings Fund shall be treated 
                        as a trust described in section 401(a) which is 
                        exempt from taxation under section 501(a);
                            (B) any contribution to, or distribution 
                        from, the Thrift Savings Fund shall be treated 
                        in the same manner as contributions to or 
                        distributions from such a trust; and
                            (C) subject to section 401(k)(4)(B) and any 
                        dollar limitation on the application of section 
                        402(e)(3), contributions to the Thrift Savings 
                        Fund shall not be treated as distributed or made 
                        available to an employee or Member nor as a 
                        contribution made to the Fund by an employee or 
                        Member merely because the employee or Member 
                        has, under the provisions of subchapter III of 
                        chapter 84 of title 5, United States Code, and 
                        section 8351 of such title 5, an election 
                        whether the contribution will be made to the 
                        Thrift Savings Fund or received by the employee 
                        or Member in cash.
                (2) Nondiscrimination requirements.--Notwithstanding any 
            other provision of the law, the Thrift Savings Fund is not 
            subject to the nondiscrimination requirements applicable to 
            arrangements described in section 401(k) or to matching 
            contributions (as described in section 401(m)), so long as 
            it meets the requirements of this section.
                (3) Coordination with Social Security Act.--Paragraph 
            (1) shall not be construed to provide that any amount of the 
            employee's or Member's basic pay which is contributed to the 
            Thrift Savings Fund shall not be included in the term 
            ``wages'' for the purposes of section 209 of the Social 
            Security Act or section 3121(a) of this title.
                (4) Definitions.--For purposes of this subsection, the 
            terms ``Member'', ``employee'', and ``Thrift Savings Fund'' 
            shall have the same respective meanings as when used in 
            subchapter III of chapter 84 of title 5, United States Code.
                (5) Coordination with other provisions of law.--No 
            provision of law not contained in this title shall apply for 
            purposes of determining the treatment under this title of 
            the Thrift Savings Fund or any contribution to, or 
            distribution from, such Fund. (Oct. 22, 1986, Pub. L. 99-
            514, Sec. 1147(a), 100 Stat. 2493; Dec. 22, 1987, Pub. L. 
            100-202, Sec. 624(a), 101 Stat. 1329-429; Nov. 10, 1988, 
            Pub. L. 100-647, Sec. 1011A(m)(1), 102 Stat. 3483; Nov. 5, 
            1990, Pub. L. 101-508, Sec. 11704(a)(34), 104 Stat. 1388-
            519; July 3, 1992, Pub. L. 102-318, Sec. 521(b)(43), 106 
            Stat. 313.)
            (k) Treatment of certain amounts paid to charity
                In the case of any payment which, except for section 
            501(b) of the Ethics in Government Act of 1978, might be 
            made to any officer or employee of the Federal Government 
            but which is made instead on behalf of such officer or 
            employee to an organization described in section 170(c)--

[[Page 833]]

                            (1) such payment shall not be treated as 
                        received by such officer or employee for all 
                        purposes of this title and for all purposes of 
                        any tax law of a State or political subdivision 
                        thereof, and
                            (2) no deduction shall be allowed under any 
                        provision of this title (or of any law of a 
                        State or political subdivision thereof) to such 
                        officer or employee by reason of having such 
                        payment made to such organization.

            For purposes of this subsection, a Senator, a Representative 
            in, or a Delegate or Resident Commissioner to, the Congress 
            shall be treated as an officer or employee of the Federal 
            Government. (Nov. 30, 1989, Pub. L. 101-194, Sec. 602, 103 
            Stat. 1762; Aug. 14, 1991, Pub. L. 102-90, Sec. 314(e), 103 
            Stat. 469-470.)

                                    * * * * * * *

  

            
                             Chapter 80.--GENERAL RULES

            
                 Subchapter A.--Application of Internal Revenue Laws

                                    * * * * * * *

  

      1045  Sec. 7802. Internal Revenue Service Oversight Board.

                                    * * * * * * *

  

            (d) Specific responsibilities

                                    * * * * * * *

  

                (4) Budget.--To--
                            (A) review and approve the budget request of 
                        the Internal Revenue Service prepared by the 
                        Commissioner;
                            (B) submit such budget request to the 
                        Secretary of the Treasury; and
                            (C) ensure that the budget request supports 
                        the annual and long-range strategic plans.

                                    * * * * * * *

            The Secretary shall submit the budget request referred to in 
            paragraph (4)(B) for any fiscal year to the President who 
            shall submit such request, without revision, to Congress 
            together with the President's annual budget request for the 
            Internal Revenue Service for such fiscal year.

                                    * * * * * * *

            (f) Administrative matters

                                    * * * * * * *

                (3) Reports.--
                            (A) Annual.--The Oversight Board shall each 
                        year report with respect to the conduct of its 
                        responsibilities under this title to the 
                        President, the Committees on Ways and Means, 
                        Government Reform and Oversight, and 
                        Appropriations of the House of Representatives 
                        and the Committees on Finance, Governmental 
                        Affairs, and Appropriations of the Senate.
                            (B) Additional report.--Upon a determination 
                        by the Oversight Board under subsection 
                        (c)(1)(B) that the organization and operation of 
                        the Internal Revenue Service are not allowing it 
                        to carry out its mission, the Oversight Board 
                        shall report such determination to the Committee 
                        on Ways and Means of the House of Representa

[[Page 834]]

                        tives and the Committee on Finance of the 
                        Senate. (July 22, 1998, Pub. L. 105-206, 
                        Sec. 1101(a), 112 Stat. 691.)

                                    * * * * * * *

      1046  Sec. 7803. Commissioner of Internal Revenue; other 
                officials.

                                    * * * * * * *

            (c) Office of the Taxpayer Advocate

                                    * * * * * * *

                (2) Functions of office.

                                    * * * * * * *

                (B) Annual reports.--
                            (i) Objectives.--Not later than June 30 of 
                        each calendar year, the National Taxpayer 
                        Advocate shall report to the Committee on Ways 
                        and Means of the House of Representatives and 
                        the Committee on Finance of the Senate on the 
                        objectives of the Office of the Taxpayer 
                        Advocate for the fiscal year beginning in such 
                        calendar year. Any such report shall contain 
                        full and substantive analysis, in addition to 
                        statistical information.
                            (ii) Activities.--Not later than December 31 
                        of each calendar year, the National Taxpayer 
                        Advocate shall report to the Committee on Ways 
                        and Means of the House of Representatives and 
                        the Committee on Finance of the Senate on the 
                        activities of the Office of the Taxpayer 
                        Advocate during the fiscal year ending during 
                        such calendar year. (July 22, 1998, Pub. L. 105-
                        206, Sec. 1102(a), 112 Stat. 697.)

                                    * * * * * * *

      1047  Sec. 7805. Rules and regulations.

                                    * * * * * * *

            (b) Retroactivity of regulations

                                    * * * * * * *

                (6) Congressional authorization.--The limitation of 
            paragraph (1) may be superseded by a legislative grant from 
            Congress authorizing the Secretary to prescribe the 
            effective date with respect to any regulation. (July 30, 
            1996, Pub. L. 104-168, Sec. 1101(a), 110 Stat. 1468.)

                                    * * * * * * *

            
                    SUBTITLE G.--THE JOINT COMMITTEE ON TAXATION

            
               Chapter 91.--ORGANIZATION AND MEMBERSHIP OF THE JOINT 
                                     COMMITTEE

      1048  Sec. 8001. Authorization.
                There shall be a joint congressional committee known as 
            the Joint Committee on Taxation (hereinafter in this 
            subtitle referred to as the ``Joint Committee''). (Aug. 16, 
            1954, ch. 736, 68A Stat. 925; Oct. 4, 1976, Pub. L. 94-455, 
            Sec. 1907(a)(1), 90 Stat. 1835.)
      1049  Sec. 8002. Membership.
            (a) Number and selection
                The Joint Committee shall be composed of 10 members as 
            follows:

[[Page 835]]

                (1) From Committee on Finance.--Five members who are 
            members of the Committee on Finance of the Senate, three 
            from the majority and two from the minority party, to be 
            chosen by such Committee; and
                (2) From Committee on Ways and Means.--Five members who 
            are members of the Committee on Ways and Means of the House 
            of Representatives, three from the majority and two from the 
            minority party, to be chosen by such Committee.
            (b) Tenure of office
                (1) General limitation.--No person shall continue to 
            serve as a member of the Joint Committee after he has ceased 
            to be a member of the committee by which he was chosen, 
            except that--
                (2) Exception.--The members chosen by the Committee on 
            Ways and Means who have been reelected to the House of 
            Representatives may continue to serve as members of the 
            Joint Committee notwithstanding the expiration of the 
            Congress.
            (c) Vacancies
                A vacancy in the Joint Committee--
                            (1) Effect.--Shall not affect the power of 
                        the remaining members to execute the functions 
                        of the Joint Committee; and
                            (2) Manner of filling.--Shall be filled in 
                        the same manner as the original selection, 
                        except that--

                                (A) Adjournment or recess of Congress.--
                            In case of a vacancy during an adjournment 
                            or recess of Congress for a period of more 
                            than 2 weeks, the members of the Joint 
                            Committee who are members of the Committee 
                            entitled to fill such vacancy may designate 
                            a member of such Committee to serve until 
                            his successor is chosen by such Committee; 
                            and

                                (B) Expiration of Congress.--In the case 
                            of a vacancy after the expiration of a 
                            Congress which would be filled by the 
                            Committee on Ways and Means, the members of 
                            such Committee who are continuing to serve 
                            as members of the Joint Committee may 
                            designate a person who, immediately prior to 
                            such expiration, was a member of such 
                            Committee and who is reelected to the House 
                            of Representatives, to serve until his 
                            successor is chosen by such Committee.

            (d) Allowances
                The members shall serve without compensation in addition 
            to that received for their services as members of Congress; 
            but they shall be reimbursed for travel, subsistence, and 
            other necessary expenses incurred by them in the performance 
            of the duties vested in the Joint Committee, other than 
            expenses in connection with meetings of the Joint Committee 
            held in the District of Columbia during such times as the 
            Congress is in session. (Aug. 16, 1954, ch. 736, 68A Stat. 
            925.)
      1050  Sec. 8003. Election of chairman and vice chairman.
                The Joint Committee shall elect a chairman and vice 
            chairman from among its members. (Aug. 16, 1954, ch. 736, 
            68A Stat. 926.)
      1051  Sec. 8004. Appointment and compensation of staff.
                Except as otherwise provided by law, the Joint Committee 
            shall have power to appoint and fix the compensation of the 
            Chief of Staff of

[[Page 836]]

            the Joint Committee and such experts and clerical, 
            stenographic, and other assistants as it deems advisable. 
            (Aug. 16, 1954, ch. 736, 68A Stat. 926; Oct. 4, 1976, Pub. 
            L. 94-455, Sec. 1907(a)(2), 90 Stat. 1835.)
      1052  Sec. 8005. Payment of expenses.
                The expenses of the Joint Committee shall be paid one-
            half from the contingent fund of the Senate and one-half 
            from the contingent fund of the House of Representatives, 
            upon vouchers signed by the chairman or the vice chairman. 
            (Aug. 16, 1954, ch. 736, 68A Stat. 926.)

            
                Chapter 92.--POWERS AND DUTIES OF THE JOINT COMMITTEE

      1053  Sec. 8021. Powers.
            (a) To obtain data and inspect income returns
                            For powers of the Joint Committee to obtain 
                        and inspect income returns, see section 6103(f).
            (b) Relating to hearings and sessions
                The Joint Committee, or any subcommittee thereof, is 
            authorized--
                            (1) To hold.--To hold hearings and to sit 
                        and act at such places and times;
                            (2) To require attendance of witnesses and 
                        production of books.--To require by subpoena (to 
                        be issued under the signature of the chairman or 
                        vice chairman) or otherwise the attendance of 
                        such witnesses and the production of such books, 
                        papers, and documents;
                            (3) To administer oaths.--To administer such 
                        oaths; and
                            (4) To take testimony.--To take such 
                        testimony;

            as it deems advisable.

            (c) To procure printing and binding
                The Joint Committee, or any subcommittee thereof, is 
            authorized to have such printing and binding done as it 
            deems advisable.
            (d) To make expenditures
                The Joint Committee, or any subcommittee thereof, is 
            authorized to make such expenditures as it deems advisable.
            (e) Investigations
                The Joint Committee shall review all requests (other 
            than requests by the chairman or ranking member of a 
            committee or subcommittee) for investigations of the 
            Internal Revenue Service by the General Accounting Office, 
            and approve such requests when appropriate, with a view 
            towards eliminating overlapping investigations, ensuring 
            that the General Accounting Office has the capacity to 
            handle the investigation, and ensuring that investigations 
            focus on areas of primary importance to tax administration.
            (f) Relating to Joint Reviews
                            (1) In general.--The Chief of Staff, and the 
                        staff of the Joint Committee, shall provide such 
                        assistance as is required for joint reviews 
                        described in paragraph (2).
                            (2) Joint reviews.--Before June 1 of each 
                        calendar year after 1998 and before 2004, there 
                        shall be a joint review of the strategic plans

[[Page 837]]

                        and budget for the Internal Revenue Service and 
                        such other matters as the Chairman of the Joint 
                        Committee deems appropriate. Such joint review 
                        shall be held at the call of the Chairman of the 
                        Joint Committee and shall include two members of 
                        the majority and one member of the minority from 
                        each of the Committees on Finance, 
                        Appropriations, and Governmental Affairs of the 
                        Senate, and the Committees on Ways and Means, 
                        Appropriations, and Government Reform and 
                        Oversight of the House of Representatives.

            (Aug. 16, 1954, ch. 736, 68A Stat. 927; Oct. 4, 1976, Pub. 
            L. 94-455, Sec. 1907(a)(3), 90 Stat. 1835; Nov. 10, 1988, 
            Pub. L. 100-647, Sec. 1018(s)(1), 102 Stat. 3586; July 22, 
            1998, Pub. L. 105-206, Sec. 4001(a), 112 Stat. 783.)

      1054  Sec. 8022. Duties.
                It shall be the duty of the Joint Committee--
                (1) Investigation.--
                            (A) Operation and effects of law.--To 
                        investigate the operation and effects of the 
                        Federal system of internal revenue taxes;
                            (B) Administration.--To investigate the 
                        administration of such taxes by the Internal 
                        Revenue Service or any executive department, 
                        establishment, or agency charged with their 
                        administration; and
                            (C) Other investigations.--To make such 
                        other investigations in respect of such system 
                        of taxes as the Joint Committee may deem 
                        necessary.
                (2) Simplification of law.--
                            (A) Investigation of methods.--To 
                        investigate measures and methods for the 
                        simplification of such taxes, particularly the 
                        income tax; and
                            (B) Publication of proposals.--To publish, 
                        from time to time, for public examination and 
                        analysis, proposed measures and methods for the 
                        simplification of such taxes.
                (3) Reports.--
                            (A) To report, from time to time, to the 
                        Committee on Finance and the Committee on Ways 
                        and Means, and, in its discretion, to the Senate 
                        or House of Representatives, or both, the 
                        results of its investigations, together with 
                        such recommendations as it may deem advisable.
                            (B) Subject to amounts specifically 
                        appropriated to carry out this subparagraph, to 
                        report, at least once each Congress, to the 
                        Committee on Finance and the Committee on Ways 
                        and Means on the overall state of the Federal 
                        tax system, together with recommendations with 
                        respect to possible simplification proposals and 
                        other matters relating to the administration of 
                        the Federal tax system as it may deem advisable.
                            (C) To report, for each calendar year after 
                        1998 and before 2004, to the Committees on 
                        Finance, Appropriations, and Governmental 
                        Affairs of the Senate, and to the Committees on 
                        Ways and Means, Appropriations, and Government 
                        Reform and Oversight of the House of 
                        Representatives, with respect to--

                                (i) strategic and business plans for the 
                            Internal Revenue Service;

                                (ii) progress of the Internal Revenue 
                            Service in meeting its objectives;

[[Page 838]]

                                (iii) the budget for the Internal 
                            Revenue Service and whether it supports its 
                            objectives;

                                (iv) progress of the Internal Revenue 
                            Service in improving taxpayer service and 
                            compliance;

                                (v) progress of the Internal Revenue 
                            Service on technology modernization; and

                                (vi) the annual filing season.

                (4) Cross reference.--
                            For duties of the Joint Committee relating 
                        to refunds of income and estate taxes, see 
                        section 6405. (Aug. 16, 1954, ch. 736, 68A Stat. 
                        927; July 22, 1998, Pub. L. 105-206, 
                        Sec. 4002(a), 112 Stat. 784.)
      1055  Sec. 8023. Additional powers to obtain data.
            (a) Securing of data
                The Joint Committee or the Chief of Staff of the Joint 
            Committee, upon approval of the Chairman or Vice Chairman, 
            is authorized to secure directly from the Internal Revenue 
            Service or the office of the Chief Counsel for the Internal 
            Revenue Service, or directly from any executive department, 
            board, bureau, agency, independent establishment, or 
            instrumentality of the Government, information, suggestions, 
            rulings, data, estimates, and statistics, for the purpose of 
            making investigations, reports, and studies relating to 
            internal revenue taxation. In the investigation by the Joint 
            Committee on Taxation of the administration of the internal 
            revenue taxes by the Internal Revenue Service, the Chief of 
            Staff of the Joint Committee on Taxation is authorized to 
            secure directly from the Internal Revenue Service such tax 
            returns, or copies of tax returns, and other relevant 
            information, as the Chief of Staff deems necessary for such 
            investigation, and the Internal Revenue Service is 
            authorized and directed to furnish such tax returns and 
            information to the Chief of Staff together with a brief 
            report, with respect to each return, as to any action taken 
            or proposed to be taken by the Service as a result of any 
            audit of the return.
            (b) Furnishing of data
                The Internal Revenue Service, the office of the Chief 
            Counsel for the Internal Revenue Service, executive 
            departments, boards, bureaus, agencies, independent 
            establishments, and instrumentalities are authorized and 
            directed to furnish such information, suggestions, rulings, 
            data, estimates, and statistics directly to the Joint 
            Committee or to the Chief of Staff of the Joint Committee, 
            upon request made pursuant to this section.
            (c) Application of subsections (a) and (b)
                Subsections (a) and (b) shall be applied in accordance 
            with their provisions without regard to any reorganization 
            plan becoming effective on, before, or after the date of the 
            enactment of this subsection. (Aug. 16, 1954, ch. 736, 68A 
            Stat. 928; Sept. 22, 1959, Pub. L. 86-368, Sec. 2(b), 73 
            Stat. 648; Oct. 4, 1976, Pub. L. 94-455, Sec. Sec. 1210(c), 
            1907(a)(4), 90 Stat. 1711, 1835.)

[[Page 839]]



            
              SUBTITLE H.--FINANCING OF PRESIDENTIAL ELECTION CAMPAIGNS

            
                  Chapter 95.--PRESIDENTIAL ELECTION CAMPAIGN FUND

                                    * * * * * * *

      1056  Sec. 9009. Reports to Congress; regulations.
            (a) Reports
                The Commission shall, as soon as practicable after each 
            presidential election, submit a full report to the Senate 
            and House of Representatives setting forth--
                            (1) the qualified campaign expenses (shown 
                        in such detail as the Commission determines 
                        necessary) incurred by the candidates of each 
                        political party and their authorized committees;
                            (2) the amounts certified by it under 
                        section 9005 for payment to the eligible 
                        candidates for each political party;
                            (3) the amount of payments, if any, required 
                        from such candidates under section 9007, and the 
                        reasons for each payment required;
                            (4) the expenses incurred by the national 
                        committee of a major party or minor party with 
                        respect to a presidential nominating convention;
                            (5) the amounts certified by it under 
                        section 9008(g) for payment to each such 
                        committee; and
                            (6) the amount of payments, if any, required 
                        from such committees under section 9008(h), and 
                        the reasons for each such payment.

            Each report submitted pursuant to this section shall be 
            printed as a Senate document.

            (b) Regulations, etc
                The Commission is authorized to prescribe such rules and 
            regulations in accordance with the provisions of subsection 
            (c), to conduct such examinations and audits (in addition to 
            the examinations and audits required by section 9007(a)), to 
            conduct such investigations, and to require the keeping and 
            submission of such books, records, and information, as it 
            deems necessary to carry out the functions and duties 
            imposed on it by this chapter.
             (c) Review of regulations
                (1) The Commission, before prescribing any rule or 
            regulation under subsection (b), shall transmit a statement 
            with respect to such rule or regulation to the Senate and to 
            the House of Representatives, in accordance with the 
            provisions of this subsection. Such statement shall set 
            forth the proposed rule or regulation and shall contain a 
            detailed explanation and justification of such rule or 
            regulation.
                (2) If either such House does not, through appropriate 
            action, disapprove the proposed rule or regulation set forth 
            in such statement no later than 30 legislative days after 
            receipt of such statement, then the Commission may prescribe 
            such rule or regulation. Whenever a committee of the House 
            of Representatives reports any resolution relating to any 
            such rule or regulation, it is at any time thereafter in 
            order (even though a previous motion to the same effect has 
            been disagreed to) to move to proceed to the consideration 
            of the resolution. The motion is highly privileged and is 
            not debatable. An amendment to the motion

[[Page 840]]

            is not in order, and it is not in order to move to 
            reconsider the vote by which the motion is agreed to or 
            disagreed to. The Commission may not prescribe any rule or 
            regulation which is disapproved by either such House under 
            this paragraph.
                (3) For purposes of this subsection, the term 
            ``legislative days'' does not include any calendar day on 
            which both Houses of the Congress are not in session.
                (4) For purposes of this subsection, the term ``rule or 
            regulation'' means a provision or series of interrelated 
            provisions stating a single separable rule of law. (Dec. 10, 
            1971, Pub. L. 92-178, Sec. 801, 85 Stat. 569; Oct. 15, 1974, 
            Pub. L. 93-443, Sec. Sec. 404(c)(12), (13), 406(b), 88 Stat. 
            1292, 1296; May 11, 1976, Pub. L. 94-283, Sec. 304(a), 90 
            Stat. 498.)

                                    * * * * * * *

            
             Chapter 96.--PRESIDENTIAL PRIMARY MATCHING PAYMENT ACCOUNT

                                    * * * * * * *

      1057  Sec. 9039. Reports to Congress; regulations.
            (a) Reports
                The Commission shall, as soon as practicable after each 
            matching payment period, submit a full report to the Senate 
            and House of Representatives setting forth--
                            (1) the qualified campaign expenses (shown 
                        in such detail as the Commission determines 
                        necessary) incurred by the candidates of each 
                        political party and their authorized committees,
                            (2) the amounts certified by it under 
                        section 9036 for payment to each eligible 
                        candidate, and
                            (3) the amount of payments, if any, required 
                        from candidates under section 9038, and the 
                        reasons for each payment required.

            Each report submitted pursuant to this section shall be 
            printed as a Senate document.

            (b) Regulations, etc
                The Commission is authorized to prescribe rules and 
            regulations in accordance with the provisions of subsection 
            (c), to conduct examinations and audits (in addition to the 
            examinations and audits required by section 9038(a)), to 
            conduct investigations, and to require the keeping and 
            submission of any books, records, and information, which it 
            determines to be necessary to carry out its responsibilities 
            under this chapter.
            (c) Review of regulations
                (1) The Commission, before prescribing any rule or 
            regulation under subsection (b), shall transmit a statement 
            with respect to such rule or regulation to the Senate and to 
            the House of Representatives, in accordance with the 
            provisions of this subsection. Such statement shall set 
            forth the proposed rule or regulation and shall contain a 
            detailed explanation and justification of such rule or 
            regulation.
                (2) If either such House does not, through appropriate 
            action, disapprove the proposed rule or regulation set forth 
            in such statement no later than 30 legislative days after 
            receipt of such statement, then the Commission may prescribe 
            such rule or regulation. Whenever a committee of the House 
            of Representatives reports any resolution relat

[[Page 841]]

            ing to any such rule or regulation, it is at any time 
            thereafter in order (even though a previous motion to the 
            same effect has been disagreed to) to move to proceed to the 
            consideration of the resolution. The motion is highly 
            privileged and is not debatable. An amendment to the motion 
            is not in order, and it is not in order to move to 
            reconsider the vote by which the motion is agreed to or 
            disagreed to. The Commission may not prescribe any rule or 
            regulation which is disapproved by either such House under 
            this paragraph.
                (3) For purposes of this subsection, the term 
            ``legislative days'' does not include any calendar day on 
            which both Houses of the Congress are not in session.
                (4) For purposes of this subsection, the term ``rule or 
            regulation'' means a provision or series of interrelated 
            provisions stating a single separable rule of law. (Oct. 15, 
            1974, Pub. L. 93-443, Sec. 408(c), 88 Stat. 1301; May 11, 
            1976, Pub. L. 94-283, Sec. 304(b), 90 Stat. 499.)

                                    * * * * * * *

            
                            SUBTITLE I.--TRUST FUND CODE

            
                            Chapter 98.--TRUST FUND CODE

                                    * * * * * * *

            
                          Subchapter B.--General Provisions

                                    * * * * * * *

      1058  Sec. 9602. Management of trust funds.
            (a) Report
                It shall be the duty of the Secretary of the Treasury to 
            hold each Trust Fund established by subchapter A, and (after 
            consultation with any other trustees of the Trust Fund) to 
            report to the Congress each year on the financial condition 
            and the results of the operations of each such Trust Fund 
            during the preceding fiscal year and on its expected 
            condition and operations during the next 5 fiscal years. 
            Such report shall be printed as a House document of the 
            session of the Congress to which the report is made. (Dec. 
            29, 1981, Pub. L. 97-119, Sec. 103(a), 95 Stat. 1638.)
                     28 u.s.c.--judiciary and judicial procedure

                  general and permanent laws relating to the senate